NEW YORK (TheStreet) -- Mylan (MYL - Get Report) stock is rising by 1.71% to $49.90 in afternoon trading on Tuesday, after the company officially began its offer to acquire all of Perrigo's (PRGO) outstanding ordinary shares on Monday.
Perrigo stock is gaining by 1.57% to $184.23 this afternoon.
Mylan is offering $75 in cash and 2.3 Mylan ordinary shares for each Perrigo share.
If the company is successful in completing the transaction, Perrigo shareholders will own about 40% of the combined company.
"The strategic logic behind this combination is abundantly clear and has been recognized by many third party commentators and Perrigo itself," Mylan CEO Heather Bresch said in a statement.
Perrigo "shareholders are strongly advised to take no action in relation to the offer at this time pending the board's review," the company said in a statement.
The takeover offer will expire on November 13.
Separately, TheStreet Ratings team rates MYLAN NV as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MYLAN NV (MYL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, compelling growth in net income, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 29.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 34.0% when compared to the same quarter one year prior, rising from $125.20 million to $167.80 million.
- MYLAN NV reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MYLAN NV increased its bottom line by earning $2.34 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($4.23 versus $2.34).
- The gross profit margin for MYLAN NV is rather high; currently it is at 54.81%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.07% trails the industry average.
- You can view the full analysis from the report here: MYL Ratings Report